One hotel company goes bust every other day despite ‘staycation' Britons taking more holidays at home, it was revealed today.
There were 53 hotel insolvencies in the April-June 2009 period, according to figures from accountancy firm Wilkins Kennedy.
Overall, there were 6,588 company insolvencies in the April-June 2009 period - 65% more than in the July-September 2007 period before the global economic crisis.
Wilkins Kennedy director Anthony Cork said: "The crash in property values has not just impacted on the real estate and construction sector, it has also sent a shockwave through the other sectors like hotels where property makes up a substantial part of a company's value.
"Despite the rise of the staycation, UK hotel groups are going under at a faster rate than ever. In part this is because banks are understandably reluctant to lend to companies whose underlying assets are based on property and that means hotels."
He went on: "Commercial property values have crashed, bank shareholders including the UK taxpayer have had their fingers burnt and a modest rise in the number of UK holidaymakers staying at home can't make up the weakness in the asset value of hotels. Unfortunately the average UK hotel just isn't worth what it was a couple of years ago.
Although more people are holidaying at home, it does not cover the revenue UK hotels have lost from cutbacks in business travel, lower spend on corporate conferences and the lower spend per guest on extras like spas, room-service and dinner.
By Gemma Sharkey
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